Some reflections on the Portuguese wine industry in the global crisis

“Honey, come get your stimulus package” – Non Sequitur

The current news from the global wine industry, reflects the gloom and doom of the global financial crisis. In South Africa, the honeymoon is abruptly over. Spain, the world’s 3rd largest producer is in trouble. Life is increasingly tough for France’s wine industry. These are just a few scenarios.

In stark contrast, the Portuguese wine news media recently broadcast an upbeat report on the state of the Portuguese wine industry. Viniportugal released figures for 2008 of growth in exports  to all markets, both in quantity and in value, including Brazil, Canada, Scandinavia, Far East, USA, UK and Germany. Furthermore, they predict a continued strong growth over the coming years, based on Portugal’s success in competing against New World producers such as Chile and Argentina.

In the same vein, the Agricultural minister, Jaime Silva, talked of the “continued confidence of the viticulture sector” which has not yet been affected by the economic crisis. The sector represents 1% of Portuguese BNP, is the 5th largest European producer, and 10th largest global wine producer. Is Portugal immune to the economic malaise? Is this not a risky assumption for a Portuguese winery to make?

ViniPortugal is the generic marketing body for promoting Portuguese wine, who make it possible for a small winery like ours to participate in global tastings and major wine fairs at a fraction of the actual costs. Thanks to their hardwork, during 2009 Portuguese winemakers will be showing their wines in Toronto, Calgary, Vancouver, Quebec, London, Dublin, Helsinki, Goteborg, Oslo, Aarhus, Koln, Macau, Hong Kong, Shanghai, SF, NY, Miami, Frankfurt, Wiesbaden, Brazil, Angola – to name just some!  As you can see, we have a lot of events to pick and choose from!   Many especially emerging wine brands are betting on growing exports to pay for new winery investments made during the ‘fatter’ years.

Although there has been a recent emergence of high-end iconic Portuguese wines (mostly Douro) with +90 Parker and WS ratings listed around $100, the majority of Portuguese wines being shown in these global tastings represent good value, with competitive price/quality ratios. These are the wines, which the Portuguese wine industry needs to show off to the world at the next PROWEIN or  LondonWineFair during an economic crisis.

Over the past 15 years, Cortes de Cima has built up a global sales network spread over 21 countries on 5 continents – N/S Americas, Asia, Africa and Europe. Exports represent a steady 30% of our sales, with our home market absorbing the remaining 70%. Needless to say, our 2 main brands, the entry level  Chaminé (blue label) and our flagship Cortes de Cima (red pot) have gained a global popularity, due to their competitive price/quality ratio and their consistent track record. These are the wines we are betting on to keep our winery going through good times and bad.